What is a bubble? It is a collective belief. What is a crash? It is the collapse of that belief. AI has given rise to two bubbles. There is a stock market bubble – the two highest-profile players, OpenAI and Anthropic, are expected to launch IPOs heralding astronomical market capitalizations of around $1 trillion each. But this is underwritten by a credit bubble, which is of even greater concern. Stock market crashes are often more spectacular than destructive – causing losses in asset value – whereas credit bubbles, when they burst, trigger a cascade of defaults throughout the financial system.
Two bubbles, generated by a collective belief powerful enough to sustain a mobilization of capital unprecedented in the history of capitalism. Let us grant that US capitalists know a thing or two about spinning a story – that is, generating a belief. This time, they have spared no effort, treating us to the most grandiose visions. But these have taken an unusual and paradoxical form: convincing humanity of the terrible, near-existential risks of the product they are selling. The head of Anthropic, Dario Amodei, has mastered this rhetorical style, which under the guise of contrition delivers an entirely self-serving message:
1) AI poses a massive danger, meaning it is a tool of unprecedented power, which ought to interest you greatly;
2) I have spawned a monster, but I’m admitting it therefore my conscience is clear (so buy from me to get a dose of virtue along with your lethal weapon);
3) The government of the Free World is now on notice that this weapon must not fall into anyone else’s hands – the Chinese, say? The horror! – whereas my own hands, as I mentioned, are clean;
4) Given the world-shaking significance of all this, if things go south financially we should under no circumstances be allowed to fail like a lowly Lehman Brothers.
It is the perfect legend: the future of humanity at stake, villains who must not get their hands on the prize. Of course, a legend is not a business model. Until now, it was sufficient to cast a spell, and what a spell it cast: since 2020, the ‘Big Five’ – Microsoft, Google, Oracle, Meta and Amazon – have poured $1.9 trillion into the cauldron. Now, however, it needs to deliver a return – if not soon, which isn’t on the cards, then eventually, and on a scale commensurate with the investment. Those expressing scepticism about this were initially dismissed as grumblers, killjoys incapable of experiencing the thrill of the miraculous, of envisioning the great civilizational breakthrough of our time. How long can the collective belief in AI withstand evidence to the contrary? The answer: a long time, but not forever – especially when warning signs begin to multiply, as they are now. We may well be witnessing the start of the erosion of that belief; once a critical threshold is crossed, a financial correction will ensue as brutal as the preceding frenzy was manic.
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